The FDIC has issued its final rule establishing recordkeeping requirements for qualified financial contracts (“QFCs”) held by banks in “troubled” condition (the “Rule”). The purpose of the Rule is to enable the FDIC, upon receivership, to have the necessary information available to make expeditious and well-informed decisions with respect to the management of failed bank’s QFC portfolio.

The Rule will become effective 30 days after publication in the Federal Register. Compliance with the Rule will generally be required within 60 days after a bank receives written notice from the FDIC or its primary Federal regulator that it is in troubled condition. The Rule defines “troubled condition” and sets forth three categories of recordkeeping requirements: (1) position level data; (2) counterparty level data; and (3) certain other files, including relevant contracts and documents, lists of counterparty identifiers, lists of counterparty affiliates, lists of affiliates that are counterparties to QFC transactions, related organizational charts and lists of supporting vendors.

Generally, position and counterparty level data must be maintained in electronic form. However, for troubled institutions with less than 20 open QFC positions, the required data may be recorded and maintained in written format so long as the data are capable of being updated on a daily basis.